Bill Text: AZ SB1348 | 2016 | Fifty-second Legislature 2nd Regular | Chaptered
Bill Title: County treasurer; warrants; electronic transfers
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2016-05-18 - Chapter 340 [SB1348 Detail]
Download: Arizona-2016-SB1348-Chaptered.html
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House Engrossed Senate Bill |
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State of Arizona Senate Fifty-second Legislature Second Regular Session 2016
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CHAPTER 340
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SENATE BILL 1348 |
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AN ACT
Amending sections 11‑634, 11‑635, 11‑636 and 11‑637, Arizona Revised Statutes; repealing section 11‑638, Arizona Revised Statutes; amending sections 11‑640, 11‑645 and 35‑323, Arizona Revised Statutes; relating to claims and warrants.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 11-634, Arizona Revised Statutes, is amended to read:
11-634. Payment of warrants, substitute checks and electronic funds transfers; definitions
A. When If the board of supervisors, the county superintendent of schools or a special district presents a warrant, or substitute check or electronic funds transfer for payment, the county treasurer shall pay it and make a charge against the appropriate account. An electronic image of the original warrant or an electronic record of the electronic funds transfer provided by or made available by the servicing bank in a format approved by the county treasurer shall be is deemed properly presented.
B. For the purposes of this section: ,
1. "Substitute check" and has the same meaning prescribed in section 9‑249.
2. "Warrant" have has the same meanings meaning prescribed in section 9‑249 and includes a record from which an electronic funds transfer may be made.
Sec. 2. Section 11-635, Arizona Revised Statutes, is amended to read:
11-635. Warrants, substitute checks and electronic funds transfers unpaid for lack of monies; interest; definitions
A. If a revolving line of credit has not been obtained for a political subdivision or if the revolving line of credit has been expended, the treasurer shall write or stamp on the face of the warrant or substitute check "not paid for lack of funds" and the date of presentation, and from that time until it is paid, the warrant or substitute check shall bear no more than ten per cent interest per year spent and if there are insufficient monies in the issuer's account, the county treasurer may invest in the warrant, substitute check or electronic funds transfer prescribed in section 35‑323, subsection A, paragraph 7.
B. The county treasurer shall keep a register of warrants and substitute checks and a record of electronic funds transfers presented for payment.
C. If the county treasurer does not invest in the presented warrant, substitute check or electronic funds transfer, the county treasurer shall notify the servicing bank that the warrant or substitute check will not be paid for lack of monies and from that time until there are sufficient monies to pay the original warrant, the original warrant may not bear more than ten percent interest per year.
C. D. For the purposes of this section: ,
1. "Substitute check" and has the same meaning prescribed in section 9‑249.
2. "Warrant" have has the same meanings meaning prescribed in section 9‑249 and includes a record from which an electronic funds transfer may be made.
Sec. 3. Section 11-636, Arizona Revised Statutes, is amended to read:
11-636. Effect on interest after notice of readiness to pay unpaid warrants; notice requirements
A. When If there is are sufficient money monies in the treasury to pay the warrants that have been returned and are drawing interest, the county treasurer shall give notice thereof by publication in some a newspaper published in the county, or by posting written notice posted at the court house courthouse door, or on the county's website stating that he the county treasurer is ready to pay the warrants. From the first publication or posting of the notice the warrants shall cease to draw interest.
B. In the notice published in a newspaper, the county treasurer shall not publish the warrants in detail, but shall give notice only that only county warrants presented for payment prior to such a before the date, as stated in the notice, are payable. When If only part of the warrants presented on the same day are payable, the county treasurer shall designate the payable warrants in the notice.
Sec. 4. Section 11-637, Arizona Revised Statutes, is amended to read:
11-637. Effect of priority of presentment on preference of payment
Warrants are entitled to preference of payment from money monies applicable to the warrants according to priority of presentment. The treasurer, upon receipt of money not otherwise appropriated, shall set it apart or so much thereof as is necessary for payment of the warrants.
Sec. 5. Repeal
Section 11-638, Arizona Revised Statutes, is repealed.
Sec. 6. Section 11-640, Arizona Revised Statutes, is amended to read:
11-640. Record of interest paid
When If the county treasurer pays a warrant on which interest is due, he the treasurer shall record the amount of interest paid in the register or call warrant list. The amount of such the interest shall be entered on his the account separate from the principal.
Sec. 7. Section 11-645, Arizona Revised Statutes, is amended to read:
11-645. Warrants, substitute checks and electronic funds transfers unpaid for lack of monies; interest; notice; reissued warrants; definitions
A. Notwithstanding sections 11‑635, and 11‑636 and 11‑638, this section applies to each county treasurer of a county in this state that has a population of two million or more persons.
B. If a revolving line of credit has not been obtained for a political subdivision or if the revolving line of credit has been expended spent and if there are insufficient funds monies in the issuer's account, the county treasurer shall write or stamp on the face of the may invest in the warrant, substitute check or electronic funds transfer prescribed in section 35‑323, subsection A, paragraph 7. If the county treasurer does not invest in the presented warrant, or substitute check "not or electronic funds transfer, the county treasurer shall notify the servicing bank that the warrant or substitute check will not be paid for lack of funds" and the date of presentation, monies and from that time until it is paid there are sufficient monies to pay the original warrant, the original warrant or substitute check shall may not bear no more than ten per cent percent interest per year. If a physical warrant is not presented to the county treasurer but the county treasurer receives an electronic notice that the warrant was issued, the treasurer shall notify the servicing bank that the warrant will not be paid for lack of funds monies, and from that time until there are sufficient funds monies to pay the original warrant, the original amount of the warrant shall may not bear no more than ten per cent percent interest per year.
C. The county treasurer shall keep a register of warrants and substitute checks presented for payment and a record of electronic funds transfers.
D. When If there is are sufficient money monies in the treasury to pay the warrants drawing interest and registered pursuant to this section, the county treasurer shall notify the issuing entity of the availability of the monies. The monies shall be placed in a clearing fund or other appropriate fund that is agreed on by the county treasurer and district. The issuing entity shall issue new warrants, which shall that include the original principal amount and any accrued interest, and notify the county treasurer of the warrant numbers, amounts and payees.
E. When If only part of the warrants presented on the same day are payable, the county treasurer shall designate the payable warrants and notify the issuing entity of the warrants to be paid and the warrants to be registered.
F. A warrant that is reissued pursuant to this section shall be processed pursuant to section 11‑644.
G. For the purposes of this section: ,
1. "Substitute check" and has the same meaning prescribed in section 9‑249.
2. "Warrant" have has the same meanings meaning prescribed in section 9‑249 and includes a record from which an electronic funds transfer may be made.
Sec. 8. Section 35-323, Arizona Revised Statutes, is amended to read:
35-323. Investing public monies; bidding; security and other requirements
A. The treasurer shall invest and reinvest public monies in securities and deposits with a maximum maturity of five years. All public monies shall be invested in eligible investments. Eligible investments are:
1. Certificates of deposit in eligible depositories.
2. Deposits in one or more federally insured banks or savings and loan associations placed in accordance with the procedures prescribed in section 35‑323.01.
3. Interest bearing savings accounts in banks and savings and loan institutions doing business in this state whose accounts are insured by federal deposit insurance for their industry, but only if deposits in excess of the insured amount are secured by the eligible depository to the same extent and in the same manner as required under this article.
4. Repurchase agreements with a maximum maturity of one hundred eighty days.
5. The pooled investment funds established by the state treasurer pursuant to section 35‑326.
6. Obligations issued or guaranteed by the United States or any of the senior debt of its agencies, sponsored agencies, corporations, sponsored corporations or instrumentalities.
7. Bonds, notes or other evidences of indebtedness
of this state or any of its counties, incorporated cities or towns, school
districts or special taxing districts, including registered warrants, substitute checks and electronic
funds transfers that shall bear
interest pursuant to section 11‑635.
8. Bonds, notes or evidences of indebtedness of any county, municipal district, municipal utility or special taxing district of any state that are payable from revenues, earnings or a special tax specifically pledged for the payment of the principal and interest on the obligations, and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment on principal or interest on the obligations to be purchased has occurred within five years of the date of investment, or, if such obligations were issued less than five years before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased nor any other obligations of the issuer within five years of the investment.
9. Bonds, notes or evidences of indebtedness issued by any county improvement district or municipal improvement district of any state to finance local improvements authorized by law, if the principal and interest of the obligations are payable from assessments on real property within the improvement district. An investment shall not be made if:
(a) The face value of all such obligations, and similar obligations outstanding, exceeds fifty percent of the market value of the real property, and if improvements on which the bonds or the assessments for the payment of principal and interest on the bonds are liens inferior only to the liens for general ad valorem taxes.
(b) A default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment, or, if the obligations were issued less than five years before the date of investment, a default in the payment of principal or interest has occurred on the obligations to be purchased or on any other obligation of the issuer within five years of the investment.
10. Commercial paper of prime quality that is rated within the top two ratings by a nationally recognized rating agency. All commercial paper must be issued by corporations organized and doing business in the United States.
11. Bonds, debentures, notes or other evidences of indebtedness that are denominated in United States dollars and that carry at a minimum an "A" or better rating, at the time of purchase, from at least two nationally recognized rating agencies.
12. Negotiable or brokered certificates of deposit issued by a nationally or state chartered bank or savings and loan association.
13. Securities of or any other interests in any open‑end or closed‑end management type investment company or investment trust, including exchange traded funds whose underlying investments are invested in securities allowed by state law, registered under the investment company act of 1940 (54 Stat. 789; 15 United States Code sections 80a‑1 through 80a‑64), as amended.
B. Certificates of deposit shall be purchased from the eligible depository bidding the highest permissible rate of interest. No monies over one hundred thousand dollars may be awarded at any interest rate less than one hundred three percent of the equivalent bond yield of the offer side of United States treasury bills having a similar term. If the eligible depository offering to pay the highest rate of interest has bid only for a portion of the monies to be awarded, the remainder of the monies shall be awarded to eligible depositories bidding the next highest rates of interest.
C. An eligible depository is not eligible to receive total aggregate deposits from this state and all its subdivisions in an amount exceeding twice its capital structure as outlined in the last call of condition of the superintendent of financial institutions.
D. If two or more eligible depositories submit bids of an identical rate of interest for all or any portion of the monies to be deposited, the award of the deposit of the monies shall be made to the eligible depository among those submitting identical bids having, at the time of the bid opening, the lowest ratio of total public deposits in relation to its capital structure.
E. Each bid submitted, and not withdrawn prior to the time specified, constitutes an irrevocable offer to pay interest as specified in the bid on the deposit, or portion bid for, and the award of a deposit in accordance with this section obligates the depository to accept the deposit and pay interest as specified in the bid pursuant to which the deposit is awarded.
F. The treasurer shall maintain a record of all bids received and shall make available to the board of deposit at its next regularly scheduled meeting a correct list showing the bidders, the bids received and the amount awarded. These records shall be available to the public and shall be kept in the possession of the treasurer for not less than two years from the date of the report.
G. Any eligible depository, before receiving a deposit in excess of the insured amount under this article, shall deliver collateral for the purposes of this subsection equal to at least one hundred two percent of the deposit. The collateral shall be any of the following:
1. A bond executed by a surety company that is approved by the treasury department of the United States and authorized to do business in this state. The bond shall be approved as to form by the legal advisor of the treasurer.
2. Securities or instruments of the following character:
(a) United States government or agency obligations.
(b) State, county, school district and other district municipal bonds.
3. The safekeeping receipt of a federal reserve bank or any bank located in a reserve city, or any bank authorized to do business in this state, whose combined capital, surplus and outstanding capital notes and debentures on the date of the safekeeping receipt are ten million dollars or more, evidencing the deposit therein of any securities or instruments described in this section. A safekeeping receipt shall not qualify as security, if issued by a bank to secure its own public deposits, unless issued directly through its trust department. The safekeeping receipt shall show upon on its face that it is issued for the account of the treasurer and shall be delivered to the treasurer. The safekeeping receipt may provide for the substitution of securities or instruments which that qualify under this section with the affirmative act of the treasurer.
4. Letters of credit issued by a federal home loan bank if:
(a) The letter of credit has been delivered pursuant to this section or chapter 10, article 1 of this title to the statewide collateral pool administrator.
(b) The letter of credit meets the required conditions of:
(i) Being irrevocable.
(ii) Being issued, presentable and payable at a federal home loan bank in United States dollars. Presentation may be made by the beneficiary submitting the original letter of credit, including any amendments, and the demand in writing, by overnight delivery.
(iii) If the letter of credit is for purposes of chapter 10, article 1 of this title, containing a statement that identifies the statewide collateral pool administrator as the beneficiary.
(iv) Containing an issue date and a date of expiration.
(c) For the purposes of chapter 10, article 1 of this title, the eligible depository, if notified by the statewide collateral pool administrator, is not allowed to use new letters of credit issued by a federal home loan bank if that federal home loan bank fails to pay a draw request as provided for in the letters of credit or fails to properly complete a confirmation of such letters of credit.
H. The securities, instruments or safekeeping receipt for the securities and instruments shall be accepted at market value if not above par, and, if at any time their market value becomes less than the deposit liability to that treasurer, additional securities or instruments required to guarantee deposits shall be deposited immediately with the treasurer who made the deposit and deposited by the eligible depository in which the deposit was made.
I. The condition of the surety bond, or the deposit of securities, instruments or a safekeeping receipt, must be such that the eligible depository will promptly pay to the parties entitled public monies in its custody, upon on lawful demand, and will, when required by law, pay the monies to the treasurer making the deposit.
J. Notwithstanding the requirements of this section, any institution qualifying as an eligible depository may accept deposits of public monies to the total then authorized insurance of accounts, insured by federal deposit insurance, without depositing a surety bond or securities in lieu of the surety bond.
K. An eligible depository shall report monthly to the treasurer the total deposits of that treasurer and the par value and the market value of any pledged collateral securing those deposits.
L. When a security or instrument pledged as collateral matures or is called for redemption, the cash received for the security or instrument shall be held in place of the security until the depository has obtained a written release or provided substitute securities or instruments.
M. The surety bond, securities, instruments or safekeeping receipt of an eligible depository shall be deposited with the treasurer making the deposit, and the treasurer shall be the custodian of the bond, securities, instruments or safekeeping receipt. The treasurer may then deposit with the depository public monies then in the treasurer's possession in accordance with this article, but not in an amount in excess of the surety bond, securities, instruments or safekeeping receipt deposited, except for federal deposit insurance.
N. The following restrictions on investments are applicable:
1. An investment of public operating fund monies shall not be invested for a maturity of longer than five years.
2. The board of deposit may order the treasurer to sell any of the securities, and any order shall specifically describe the securities and fix the date upon on which they are to be sold. Securities so ordered to be sold shall be sold for cash by the treasurer on the date fixed in the order, at the then current market price. The treasurer and the members of the board are not accountable for any loss occasioned by sales of securities at prices lower than their cost. Any loss or expense shall be charged against earnings received from investment of public funds.
3. Investments shall not be made in companies identified pursuant to section 35‑392, subsection A, paragraph 1.
O. If the total amount of subdivision monies available for deposit at any time is less than the maximum coverage amount of the federal deposit insurance corporation, the subdivision board of deposit shall award the deposit of the funds to an eligible depository in accordance with an ordinance or resolution of the governing body of the subdivision. Deposits of less than the maximum coverage amount of the federal deposit insurance corporation are not subject to the requirements of this chapter.
Sec. 9. Delayed repeal
Section 35-319, Arizona Revised Statutes, as added by House Bill 2703, section 4, fifty‑second legislature, second regular session, as transmitted to the governor, is repealed:
1. From and after the effective date of this act, if the amendments to article X, section 7, Constitution of Arizona, and article XI, Constitution of Arizona, are not approved by a vote of the people at the special election conducted on May 17, 2016.
2. From and after June 30, 2025, if the amendments to article X, section 7, Constitution of Arizona, and article XI, Constitution of Arizona, are approved by a vote of the people at the special election conducted on May 17, 2016.
Sec. 10. Distribution; permanent state trust land fund monies; fiscal years 2016-2017 and 2017-2018
Notwithstanding section 35-319, Arizona Revised Statutes, as added by House Bill 2703, section 4, fifty‑second legislature, second regular session, as transmitted to the governor, in fiscal years 2016‑2017 and 2017‑2018, the state treasurer shall make the distributions pursuant to article X, section 7, Constitution of Arizona, and sections 37‑521, 37‑522, 37‑523, 37‑524 and 37‑525, Arizona Revised Statutes, on the last business day of each month.
APPROVED BY THE GOVERNOR MAY 18, 2016.
FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 18, 2016.
